How can we master short-term trading? What are the risks associated with it?
If you have money that you are looking to invest in the stock market, traditional wisdom would throw up a ‘Purchase and Hold’ strategy. Here, you can purchase the stocks and hold on to them for some time, ranging from weeks, months to years. Short-term trading refers to the strategy where one holds the stocks only for a few minutes to a few hours and sells out within the same trading session. Short-term trading is gaining popularity as a way to benefit from minimal market movements against the traditional long-hold method as market participants are becoming more aware and real-time information is becoming easily accessible. Here you can find more on short-term trading and the ways to master it. What is short-term trading? The trading strategy where the time difference between entering and exiting the market is short is termed short-term trading. This time range can simply be a few minutes, hours, or even a few days. With short-term trading, your primary focus is on price action and not on the longevity of any asset’s market value. In this trading method, which also goes by the term ‘active trading’, you stand a chance to profit from the swift market price movements. However, for